Austerity and the rise of poverty in Britain

Poverty and social hardship
in the UK

With Gross Domestic
Product (GDP) at US $2.94 trillion (2014), the UK
has the fifth largest
economy in the world after Germany
and Japan.
It also suffers from acute income and wealth inequality and, according to Oxfam, “one in five [or 20%] of
the population live below our official poverty line, meaning that they experience life as a daily
struggle.”

The Conservative
government repeatedly proclaims that the bitter medicine of economic austerity,
so badly needed to ‘balance the nations wobbly books’, is the ‘right thing to
do’ – yes, it’s painful, but "we’re all in this together" and our
economic plan is working. Unemployment and inflation are low, and the economy
is ‘growing’, faster in fact than any other
industrialised nation.

The poor get poorer

...according to Oxfam, “one in five [or 20%] of
the population live below our official poverty line, meaning that they experience life as a daily
struggle.”Given all this good news,
one would expect the people of Britain
to be doing rather well; however, this is far from the case. After extensive investigation,
the independent research
project, Poverty and Social
Exclusion (PSE) in the United Kingdom, concluded that poverty in Britain is worse now
“than it has been for the past thirty years”, indeed the number of people
living in poverty “has doubled since 1983”.

The
findings of PSE contradict the up-beat rhetoric of Prime Minister Cameron and co.,
but echo those of leading
charities including Oxfam and Barnardo’s, who state that: “there are currently 3.7 million
children living in poverty in the UK.” That’s over a quarter of all
children.

Poverty is a slippery term to define, and
‘severe poverty’ even more so. Governments around the world use various
criteria to determine whether someone is poor or not, criteria which more often
than not are shaped to serve the interests of the ruling party. The UK government
employs a simplistic, rather crude method: if a family is earning less than 60
per cent of median income [currently £26,000 (US $40,000)] then they are in
poverty. This unimaginative, narrow approach, PSE explains, is “an arbitrary
definition and has been much criticized”. PSE defines poverty more broadly,
based on the ‘Consensual method’. This includes “multiple deprivation and income”,
minimum “acceptable living standards” as well as social exclusion, and is to
the objective observer a far more intelligent and just system.

The detailed PSE report
is full of depressing details: chief amongst the headline statistics are the
findings that “a third of people in the UK suffer significant
difficulties and about a quarter have an unacceptably low standard of living”;
“4 million children and adults are not properly fed by today’s standards;
around 1.5 million children live in households that cannot afford to heat their
home and up to 2.5 million children live in homes that are damp.”

The
impact of poverty on children is acute and long lasting, perpetuating social
injustice and inequality – a major problem in the UK. The children’s charity Barnado’s studied the educational
and health effects of child poverty. They found that poor children do worse at
school – a mere 5% of the poorest achieve “a good level of development at the end
of their reception year [aged 5/6 years]”, compared to almost 70% of other
pupils. The poorest teenagers pass less exams, if any, and consequently
cannot go to university, making it harder for them to get
a good, fulfilling and well paid job, one that allows them to move out of the prison
of poverty.

Health-wise it’s an even bleaker picture: infant
mortality is 10% higher for children in the
lowest social groups than the average, and three-year-olds “living in
households with income’s below about £10,000 are 2.5 times more likely to
suffer chronic illness than children from financially better off families.” These shocking facts reveal some of the consequences of the government’s
ideological economic approach.

“there are currently 3.7 million
children living in poverty in the UK.” That’s over a quarter of all
children.It is a neoliberal strategy, set firmly in motion
in the 1980’s under Margaret Thatcher. It was characterized, Oxfam explains, by “financial liberalisation,
the erosion of social security and deregulation of the labour market.” By 2008,
this approach, continued with New Labour under Blair, had “led to a dramatic increase in the number of people living in poverty,
which almost doubled, from 7.3 million people in 1979 to 13.5 million in 2008,”
and has fuelled the highest levels of income and wealth inequality of any industrialised
country except the USA. It is estimated, The
Guardianreports, that the richest 1% in the country “have [now] accumulated as much wealth as the poorest 55% of the
population put together”, and under the government’s economic plan such
divisions will only increase.

Inequality is the inevitable consequence of the
injustices inherent in neoliberalism, the stronger an economy is wedded to neoliberal
principles, the greater the inequality. The idea of ‘trickle down’ is a failed
fantasy promulgated by the rich to keep the poor impoverished. Wealth,
opportunity and influence flow in one direction only – up, as Arundhati Roy puts it, “trickle down hasn’t worked. But Gush Up has”.

Inequality fuels all manner of social ills, from
teenage pregnancies, to homicide, depression and distrust, drug and alcohol
dependency, obesity and illiteracy. With CEO’s of major corporations earning up
to 100 times the average UK
wage (£12 [$18] per hour), it’s a miracle that there aren’t violent mass
protests taking place all the time. But then people are far too exhausted from
excessive working hours and the stress of economic hardship to have the
strength for righteous rebellion, and of course TV, poor diet, alcohol and
associated distractions ensure that social conformity, material discontent and
emotional passivity are pretty much maintained.

Suffering by ideological design

After the financial
calamity of 2008/9 a number of countries across Europe (Spain, Portugal,
Greece e.g. – all now in recession)
introduced austerity policies, and since 2010, austerity has been
the UK
government’s strategy for tackling the impact of the economic crash.The stated aim of the Conservatives’
programme is “to
reduce the deficit… give confidence to the markets and therefore deliver growth
to the economy.”

Their one sided methodology
involves extreme public sector cutbacks, including scrapping over 1
million jobs by 2018 and freezing wages; making severe reductions in welfare,
as well as introducing nominal tax increases (“for every £100 of deficit
reduction, £85 comes through spending cuts, while £15 is achieved through
increased taxes”, Oxfam relate).” As
administered by the Conservatives, austerity amounts to a war on the poor, and
is the principal cause of the dramatic increase in poverty, including child poverty
and homelessness. as Arundhati Roy puts it, “trickle down hasn’t worked. But Gush Up has”.

The
government proposes to cut £12 billion (US $18.4bn) by 2017/18 from welfare
spending, and have already made a devastating start. Tax credits have been
slashed, all benefits will be frozen for four years, despite inflation, and the
total amount of welfare someone can claim has been reduced.The most vulnerable members of society are taking the full hit from
their aggressive, regressive policies, with women and children being affected
most acutely – directly and indirectly. Despite having a statutory duty to end child
poverty by 2020, according to Oxfam an additional “one million children will be pushed
into poverty as a result” of their socially divisive, unjust policies, and an extra “1.5 million working-age
adults are expected to fall into poverty”.

We are constantly told
that austerity is the uncomfortable route to ‘sustained economic growth’ and
the promised land of ‘Zero Deficit’. An ideological paradise, which the
Conservatives claim will more than make up for the hardships, destruction of
public services and personal pain caused along the way. In fact the UK budget
deficit (what the government borrow each year) is estimated to be 4.9% of GDP or £88
billion (US$ 134
billion) this year
– an all time high, and government
debt at around £1.5 trillions (US $2.4 trillions) is almost
double what it was in 2010, when the Conservative-led coalition came to power.

Austerity, according to Nobel Prize-Winner Joseph Stieglitz, “has failed”, and “is contributing to inequality that will make
economic weakness longer-lived, and needlessly contributes to the suffering of
the jobless and the poor for many years.” He goes on to say that, “there is no instance of a large economy
getting to growth through austerity”. If policies based on austerity are allowed to
continue, in Britain and
elsewhere across Europe, Oxfam warns
inequality will rise, the continent’s hard fought social gains will be
undermined, and a generation will be consigned to a life of hopeless poverty.

The
need for real alternatives

The devotees of neoliberalism are often heard
chanting that there is no alternative to their peculiar economic belief system.
It is a model that has served them well, and to which, perhaps understandably,
they are deeply attached; austerity, it appears, is being used to further
disempower the majority. A well rehearsed party rhetoric is constantly churned
out, – ‘it’s either increased debt, or austerity', they sing, and we must,
‘live within our means’ – easy when your ‘means’ run into the millions,
difficult when your benefit is cut and you can’t afford to buy any food, or
heat your home.

If we are to create a just society throughout the world, we
need a totally new approach to the way the economy is managed, a radical vision
of society. An approach that transcends ideologies and places the principle of
sharing at its heart; an approach which meets the needs and rights of the many
– not just the basic needs of food and shelter, but the right to grow as a
human being.

As Oxfam states “the economic, ethical, and financial
argument for change could not be stronger.”

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About the author

Graham is an artist, writer and director of The Create Trust, an NGO he founded in 2006. He has run education projects and teacher training programs in Palestine, India and Ethiopia, where he spent two years working with local groups in Addis Ababa. His website is here.

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